Old Mutual, SCMB pile into new infrastructure fund
Old Mutual, SCMB pile into new infrastructure fund
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Financial Services Correspondent
BOOSTING their charter prospects, Standard Corporate & Merchant Bank (SCMB) and Old Mutual are the largest of five major investors pumping R675m into a new fund to invest in South African infrastructure projects such as bridges, roads, ports and water projects.
This is the single largest private- sector investment in infrastructure. A key incentive for banks and finance firms to get involved is that it will score them points on the charter scorecard.
According to the charter, companies can score up to 22% more on the scorecard for helping finance "projects in areas where gaps or backlogs in economic development and job creation have not been adequately addressed".
With growing pressure on companies to spend more on these projects, the private sector is set to play a larger part in strengthening SA's infrastructure.
The fund will be known as the African Infrastructure Investment Fund and it has already raised R675m. It will be run by African Infrastructure Investment Managers (AIMM), a joint venture between Macquarie Bank of Australia and Old Mutual Asset Managers (Omam).
Besides Old Mutual and SCMB, the other investors that have already signed up are Metropolitan Life, Stanlib Asset Management and the Eskom Pension and Provident Fund.
In exchange for funding, these five investors and any future ones will participate in the performance of the individual projects, getting a cut of any future dividends from the projects.
AIMM MD Gavin Kerr said more investors were being sought and the finance charter would provide a major incentive for finance companies to invest.
"This fund certainly has been of interest to (financial companies). The charter is something that these investors are conscious of in making a commitment to this type of fund," he said.
Kerr said a number of projects had already been identified, such as toll roads and airport projects, but declined to provide any further details.
SCMB deputy MD David Munro said his firm's involvement would boost its ability to meet the charter commitments, as well as provide a good investment.
"The charter focuses on investment in infrastructure as a means of supporting economic growth and social upliftment, and our investment in (the infrastructure fund) is a positive move in supporting this goal," he said.
Old Mutual's South African MD, Roddy Sparks, said infrastructure investments helped to diversify portfolios and "in the past, have resulted in good returns for our policyholder funds".
This is the second such fund run by Omam and Macquarie, who jointly managed an earlier fund of R800m known as the South African Infrastructure Fund.
This new fund, said Kerr, was the natural successor to that fund.
Jan 22 2004 08:03:26:000AM Rob Rose Business Day 1st Edition
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